Portfolio tweaking & 4-year performance review

Tweaks
I've done some fiddling around the edges of my portfolio.  Nothing major, just tidying stuff up.

In summary:

• Sold my paltry holding of Game Group shares (on which I had an ENORMOUS capital loss).
• Bought it again immediately in a different account (in fact, about 3 times as many shares - still a paltry holding though!).
• Sold Bond International Software, crystallising another capital loss.
• Sold Maxima, for another capital loss.

The latest snapshot of my portfolio is here:

http://www.danieltebbutt.com/portfolio.html

I've now rated Rok shares as zero and put them in the "sold" category.  I'm not entirely sure if they're officially worthless yet, but my sharedealing account no longer shows them as a holidng, so...

Now everything is much tidier: only 6 shares in my portfolio: Berkshire, Tesco, NWBD, IS15, BP, GMG.  And only one real tiddler: GMG.

Review

While I'm here I may as well post some performance figures for my portfolio in 2011.  Bit misleading since my trading was almost entirely driven by external factors rather than trying to beat the market, but anyway...  lets compare with previous years.  I can't remember how I've worked this out before, but attempting a new and fairly simple method I get:

2008:   Down 53%

2009:   Up 42%

2010:   Up 19%

2011:   Down 3%

i.e. if I'd been a fully-invested closed investment trust then £100 at the start of 2008 would now be worth £77.  Boo.  Luckily my funds under management were very approximately:

2008: X

2009: 2X

2010: 4X

2011: X

Meaning I have an overall profit of 60%, or an annual return of 12%.  Hurrah!

I don't have data to compare with the FTSE, but staring at a graph and making up some dividend yields I come up with:

2008: Me -53%.  FTSE all-share -30%

2009: Me +42%.  FTSE +28%.

2010: Me +19%.  FTSE +14%

2011: Me -3%.  FTSE -4%.

So if I'd invested exclusively in a tracker then I would have made 39% overall, or about 8.5% per year.  

Fully invested in a tracker throughout the period I would have been down 2%.

And finally just for fun: so far in 2012 I'm down 2.6% while the wider market is up 3.3%.  Ouch - a 6% disparity already, and it's not even February...

Portfolio now up-to-date

It's been a while, but I've finally updated the portfolio page on my website:
http://www.danieltebbutt.com/portfolio.html

Key things of interest:

• My current portfolio is about a third of its peak size (because I sold almost everything when buying a house in Norway and started reinvesting when I sold my house in the UK).
• I have some big losers in my portfolio.  I kept all my losers for the tax benefits (which are worth more in Norway than in the UK) but it turned out that the losers kept on getting worse, so overall this has proved a bit stupid.
• I got lucky with the timing of some of my new purchases, and as a result BP is up 15% and Tesco 12%.
• 2 shares make up 55% of my portfolio and 5 shares make up 94%.

I have no immediate plans to make further changes to my portfolio.  I have some cash available to invest, but I don't fancy it at current prices.  If prices fall then I'll probably put it into shares, otherwise I may stick it into bonds (e.g. more IS15).  Or just hold onto cash.

Portfolio update

I haven't unpacked my desktop computer yet (!) so the portfolio page on my website is woefully out of date.  Here's the current situation, with the dates and prices of my recent purchases):

• Cash 50%
• Berkshire Hathaway 17% (bought 20/10/11 at $74.25)
• Tesco 10% (bought 27/9/11 at £3.53)
• NWBD 9% (bought 27/9/11at 93p)
• BP 5% (bought 28/9/11 at £3.79)
• GBP 1-5yr corporate bond ETF 5%
• Bond International Software 2%
• Game Group 1%
• Maxima Holdings 1%

The last 3 I'm only holding for the tax losses - Once I'm well-ensconced in the Norwegian tax system I will sell and reap the rewards.  For Game Group in particular the tax losses are worth almost as much as the shares themselves :-)

For now I'm taking a bit of a breather. I'm ready to invest about a third of my cash.  I'm still not sure whether to spend or invest the rest.

Hei fra norge

It's been over 4 months since I last posted, and I'm now living in Norway.  I've sold my house in the UK, which means that once again I have funds available for investment.  At the moment I'm a bit too busy renovating my house and learning Norwegian to do any in-depth research, so my plan is:

• Get a sensible overall asset allocation.
• Invest funds that I'm happy to tie up for the long term.
• Invest in safe, low-maintenance shares I already know well.

Asset allocation

I'm no longer tied very tightly to the UK.  I still have family and friends there, so I will be visiting regularly, but it doesn't make sense to have most of my funds tied up in sterling.  On the other hand, investment opportunities in Norway are limited, so I don't want my money tied up in kroner.  I have a vague future entitlement to some US dollars through my work, so I don't want to be overweight in dollars now.  I need a decent mix - lets say 40% UK, 30% US, 30% Euro/other.  I don't mind if shares are denominated in sterling if they're really international.

Funds for the long term

Of my available cash right now I'm going to invest half and keep the rest in cash.  I'm not yet sure if I'll spend that cash in the near future, or invest it later.

Shares I know well

Here are some of the various shares that I owned recently and was happy with:

• Berkshire Hathaway.  I need look no further for the US part of my portfolio.
• Tesco.  I like Tesco a lot, and they look pretty cheap on a P/E ratio of 11.
• Next.  I like Next, but they are in a difficult industry.  They've done fantastically well, but will they continue to do so for the next 10 years?  I wouldn't like to say.  And therefore they fail the "low-maintenance" test.
• NWBD.  Currently on a yield of just under 10%.  Seems a pretty good deal, although this is obviously totally UK focused.
• Lloyds.  Look very cheap, but beyond my powers of research, so I'm going to rule them out.
• Diageo.  Moderately expensive, and they do have a lot of debt, but I also like them quite a lot.  They're also a good international company - although the share price is in sterling the UK is not a big market for them.  
• British American Tobacco.  Too expensive on a P/E ratio of 19.
• BP.  Pretty cheap, and very international.
• Greene King.  Very UK focused, and although they are well-led I wouldn't like to predict how they will do in the next 10 years.

So putting it all together my candidates are:

• US: Berkshire Hathaway.
• UK: Tesco, NWBD.
• Euro/other: Diageo, BP.

I expect to invest my funds over the next few weeks.

Quick update

Since selling off 90% of my portfolio I haven't really been on the lookout for anything new, so I've been pretty quiet recently.  Sadly the world at large hasn't remained quite so static:

• Game Group continued to plummet, before staging a minor recovery.
• Maxima has cratered.

At the moment all my trading decisions are driven by tax / administrative reasons.  Accordingly I have:

• Held onto BDI, GMG and MXM in order to realise the tax losses when I move to Norway.  (Also ROK, but I can't sell those even if I want to).
• Sold IAPD to realise the capital gain at £18.82.
• Made a small investment in IS15, a short-term sterling corporate bond ETF from iShares at £102.52.  (I've recently opened a new trading account that I can use after moving to Norway and you need to hold some shares to avoid inactivity charges).

As always my entire portfolio (plus all the shares I've ever held) is available here:

http://www.danieltebbutt.com/portfolio.html

And every trade I make will appear on this blog.

P Z Cussons

As a follow-on to my recent article on Unilever, I've now written about a potential acquisition target: P Z Cussons.

Unilever

After a couple of months of being distracted by (a) buying a house, and (b) selling 90% of my portfolio, I've finally written a new article at shareworld.  I was looking for a company that I'd be happy to invest in after moving to Norway, which means it must be:

• International.  Working for a UK company gives me quite enough exposure to the £ already.  I don't mind it being listed in the UK as long as its revenues come from all over the world.
• Safe.  I am going to have a lot more debt, and far fewer financial assets.  My personal risk threshold will be much lower than it has been in the past.

So I took a look at Unilever.